U-T Offshore System, L.L.C.

Third Revised Volume No. 1

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Effective Date: 06/01/1997, Docket: RP97-146-001, Status: Effective

Third Revised Sheet No. 2 Third Revised Sheet No. 2 : Superseded

Superseding: Second Revised Sheet No. 2

PRELIMINARY STATEMENT

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I. In General

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U-T Offshore System is a general partnership formed under the laws of the State of

Delaware by Unitex Offshore Transmission Company, Transco Hydrocarbons Company and

NALOCO, Inc. (Del.), each of which is a corporation organized and existing under the

laws of the State of Delaware.

U-T Offshore System ("U-TOS") is a natural gas company engaged in the business of

transporting natural gas and operating in Louisiana as well as the Louisiana state

waters and the Federal domain, offshore Louisiana.

U-TOS does not share operating personnel or facilities with any affiliated marketing

or brokering company.

II. Transportation Agreement

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1. The Transportation Agreement, contained in U-TOS' F.E.R.C. Gas Tariff, Original

Volume No. 2, between U-TOS and a shipper sets forth the terms and conditions

of firm service under Rate Schedule T. The Agreement (in Exhibit A thereof)

sets forth the maximum daily obligation of U-TOS to transport gas for the

shipper, which is called the shipper's "Currently Effective Contract Demand."

The Agreement also sets forth the maximum volume of gas, expressed in Dth, which

U-TOS agrees to transport at each Point of Receipt. The total of the volumes

for all Points of Receipt shall equal, but cannot exceed, the Currently

Effective Contract Demand of the shipper for firm service. Firm service under

Rate Schedule T shall also be subject to the penalty provisions of Section 4.5

of Rate Schedule FT, and Section 8 of the General Terms and Conditions, as set

forth in U-TOS' F.E.R.C. Gas Tariff, Third Revised Volume No. 1.

2. The Transportation Agreement contained in U-TOS' F.E.R.C. Gas Tariff, Third

Revised Volume No. 1, and designated for use under transportation Rate Schedule

FT, sets forth the terms and conditions of firm service under that rate

schedule. The Transportation Agreement under Rate Schedule FT shall be used in

all instances where U-TOS enters into a new agreement to perform firm

transportation service.

3. The Transportation Agreement contained in U-TOS' F.E.R.C. Gas Tariff, Third

Revised Volume No. 1, and designated for use under transportation Rate Schedule

IT, sets forth the terms and conditions of interruptible service under that rate

schedule. The Transportation Agreement under Rate Schedule IT shall be used in

all instances where U-TOS enters into a new agreement to perform interruptible

transportation service.

III. Allocation of Capacity

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1. The firm capacity in the main line has not been fully allocated among the

existing shippers.

2. The procedure to be followed by a new shipper, in order to receive an allocation

of firm capacity on the main line, is set forth in Section 2 of the General

Terms and Conditions.

3. The procedure to be followed by a new shipper, in order to receive interruptible

transportation service on U-TOS' main line, is set forth in Section 2 of the

General Terms and Conditions.